ISM Non-Manufacturing September 2010 Index - 53.2%

The ISM Non-manufacturing report for September 2010 is out. The overall index increased to 53.2%, 1.7 points higher than August's 51.5%. This report is also referred to as the services index, or service sector index. While the press is all gaga over this report, once again we know why a picture is worth a thousand words, NMI is not breaking any records here for the last two years. The ISM indexes mean anything above 50 is growth, below 50 is contraction.

 

 

Below is the table from the ISM services report, edited. The best piece of news in this report is the 11.5 percentage point change on new export orders, with Professional, Scientific & Technical Services leading the pack. That's great for our imports to exports ratio currently is 4 to 1, and the trade deficit drags down economic growth to a crawl. That said, services is a very small portion of trade, most comes from goods, which has been decimated by offshore outsourcing. Services imports increased 2.5 percentage points.

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE SEPTEMBER 2010
Index Series
Index
Sept.
Series
Index
August
Percent
Point
Change
Direction Rate
of
Change
Trend
(Months)
NMI/PMI 53.2 51.5 +1.7 Growing Faster 9
Business Activity/Production 52.8 54.4 -1.6 Growing Slower 10
New Orders 54.9 52.4 +2.5 Growing Faster 13
Employment 50.2 48.2 +2.0 Growing From Contracting 1
Supplier Deliveries 55.0 51.0 +4.0 Slowing Faster 6
Inventories 47.0 53.5 -6.5 Contracting From Growing 1
Prices 60.1 60.3 -0.2 Increasing Slower 14
Backlog of Orders 48.0 50.5 -2.5 Contracting From Growing 1
New Export Orders 58.0 46.5 +11.5 Growing From Contracting 1
Imports 53.0 50.5 +2.5 Growing Faster 2
Inventory Sentiment 59.5 60.0 -0.5 Too High Slower 160

The worst news appears to be the business activity index, defined as general activity, which dropped 1.6 percentage points, shown in the St. Louis Fed FRED graph below:

 

 

New orders increased 1.6 percentage points to 54.9%.

 

 

While employment increased 2 percentage points, it's still anemic, barely registering any growth. The below graph is re-centered around the ISM index inflection point to show we just are not creating jobs here and hiring people!

 

 

To read more sub-indices and details see the actual report (although no eye candy from the ISM).

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